Mozambique plans to begin LNG exports by 2018

Before exports can begin, billions of dollars will be spent building the giant refrigeration tanks needed to cool the gas for shipping and developing port facilities big enough to house LNG carrier vessels.

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By ALEXIS FLYNN

ABERDEEN, Scotland -- Mozambique hopes to export its first
cargoes of liquefied natural gas by 2018, President Armando
Emilio Guebuza said recently.

"We are doing our best to make sure that by 2018 the first
trains are delivered to the market," said Mr. Guebuza, who was
in Aberdeen at a conference to promote Mozambique's nascent oil
and gas industry.

The East African nation is on the cusp of becoming one of
the continent's biggest energy producers following the
discovery of giant natural-gas fields in the deep waters off
its northeast coast.

However, before any exports can begin, billions of dollars
will have to be spent building the giant refrigeration tanks
needed to cool the gas for shipping and developing port facilities big enough to house LNG
carrier vessels.

Mozambique expects it will cost at least $40 billion to
develop its natural-gas infrastructure, including a plant
capable of exporting 20 million metric tons of LNG and a local
distribution hub that will service its domestic energy needs as
well as those of its near neighbors, said Minister of Mineral
Resources Esperenca Bias.

"It will be the largest ever in Africa," said Ms. Bias.

However, it remains unclear which international companies
will ultimately build the terminal. The right to export LNG
currently rests with Italy's Eni
and US explorer Anadarko Petroleum, the two firms operating the
concessions where most of the 108 trillion cubic feet of
natural gas have been found.

Anadarko and Eni
have said in the past that they want to develop an LNG plant
together, though analysts say a project of the scale envisaged by
the Mozambique government would likely require additional
investment from bigger players able to handle the huge costs
involved and with well-established LNG shipping businesses.

Both companies are in discussions with the government about
developing an LNG plant, said Arsenio Mabote, chairman of the
state-owned chairman of the National Petroleum Institute. "It
is up to the concessionaires to decide," said Mr. Mabote,
adding that he expects the talks to conclude and a decision to
be made on how best to proceed in the next few months.

In a statement, Anadarko said: "Anadarko previously
announced a Heads of Agreement with Eni
whereby they plan to develop the common offshore natural-gas
fields in a separate, yet coordinated fashion, while developing
the onshore LNG park jointly."

Dow Jones Newswires

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